Still, throughout the last month,¬†I refrained from making¬†bearish or bullish prognostications. Rather than holding firmly to a “this-must-occur” bias, I let the information guide my decision-making. More specifically, I choose investments based on a wide variety of fundamental, historical and technical data. Then I let unemotional stop-limit loss orders¬†protect positions for a¬†large gain, small¬†gain or¬†small loss.

Of course,¬†not everyone has the patience or discipline to employ stop- limit loss orders or hedges properly. It follows that many readers simply want a “quick pick” or market direction “call.”

Rather than insist¬†that an event is imminent or certain, when the exact opposite may be the case, I simply wish to offer¬†ETF evidence of a probable correction. How you use the evidence depends upon your personal approach to risk management as well as your current positions. (For instance, an individual with 50% cash may be putting together a list of ETFs to buy¬†when stock ETFs¬†pull back significantly. In contrast, fully invested folks may want to lighten their exposure to risk assets.)

1. iPath Copper (JJC). Long-time readers know that I talk about Dr. Copper frequently. It may be one of the best indicators of investor confidence¬†(or lack thereof)¬†in the global industrial cycle.

Therefore,¬†your eyes should open¬†up wide when JJC falls below a¬†200-day moving average. The last time that it happened? April/May 2010… at the inception of the S&P 500’s nasty¬†-17% correction.

2. Vanguard Extended Duration Treasuries (EDV). “Bond king” Bill Gross, uber-hedger Doug Kass and commodities maven Jim Rogers share one thing in common. They’re all shorting U.S. treasury debt. (Ironically enough, they each appear willing to fight the Fed;¬†perhaps the end of quantitative easing has already been written on the “Wall.”)

We all know that U.S. treasury debt is undesirable… at least at these yields and¬†at these bogus ratings. Nevertheless, whenever the¬†world at large gets spooked,¬†investors still run to the perceived safety of the U.S. government.¬†The last time that the longest maturity treasury ETF — Vanguard Extended Duration (EDV)¬†– climbed above a 200-day moving average for a substantive period of time? Yep… April/May 2010.

3. iShares MSCI BRIC Fund (BKF). It has been called the emerging growth story. It is a simple concept. The vast majority of the contribution to global economic growth comes from the 4 majors — Brazil, Russia, India and China.

It’s one thing for the BRIC nations to collectively underperform for 6 months or 1 year. Their governments have been fighting currency appreciation, speculative bubbles, investment flow, socio-economic unrest and so forth. Yet it’s quite another thing to have all 4 of these countries struggle. ETFs like China 25 (FXI),¬†WisdomTree India (EPI),¬†Market Vectors Russia (RSX) and iShares MSCI Brazil (EWZ) are¬†individually battling to stay above a 200-day MA; the iShares¬†MSCI BRIC (BKF) is already failing to hold a long-term uptrend.